Answered step by step
Verified Expert Solution
Question
1 Approved Answer
4. ( 2 pts.) a) Assume someone deposits $100 cash in their checking account at Bank 1 . Graph the immediate impact of this on
4. ( 2 pts.) a) Assume someone deposits $100 cash in their checking account at Bank 1 . Graph the immediate impact of this on this bank's balance sheet (only include changes in assets and liabilities). b) Now assume this bank keeps $10 and loans out the rest. Graph its balance sheet now. c) Assume the person who takes out that loan keeps $10 in cash and spends the rest on new shoes. Assume the shoe-seller deposits that money in their checking account at Bank 2. Graph the immediate impact of this on Bank 2's balance sheet (again, only the changes). d) What has happened to total deposits in the US banking system by now? To the US money supply? 4. ( 2 pts.) a) Assume someone deposits $100 cash in their checking account at Bank 1 . Graph the immediate impact of this on this bank's balance sheet (only include changes in assets and liabilities). b) Now assume this bank keeps $10 and loans out the rest. Graph its balance sheet now. c) Assume the person who takes out that loan keeps $10 in cash and spends the rest on new shoes. Assume the shoe-seller deposits that money in their checking account at Bank 2. Graph the immediate impact of this on Bank 2's balance sheet (again, only the changes). d) What has happened to total deposits in the US banking system by now? To the US money supply
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started